E-CMNs: Is there any room for rivals?

Thursday, September 30, 2004

SCHENECTADY, N.Y. - To read from the announcements coming off the corporate news wire, no company has mopped up the industry’s e-CMN business like Trac Medical.

First, in July 2002, it was American HomePatient. Then, after a long period of cautious enthusiasm, the floodgates opened for new agreements with nearly all of the largest entities in the industry - Air Products, American Association for Homecare, Apria and that’s just for the a’s.

The question becomes, after this torrent of partnering (which also includes Praxair, Pacific Pulmonary and Rotech), has the early bird caught all of the worms.

Not at all, says Dennis Nasto, vice president of sales for SecureCare (formerly eClickMD) of Austin, Texas.

“No one has the market until the doctor does the signing,” said Nasto. “The people we are closing are the people who do the signing.”

Virtually everyone agrees that ultimately the physician will decide which system to use. The industry’s trade association has put all of its eggs in Trac’s basket with a nine-year, royalty-sharing deal announced earlier this year. The deal is something of a gamble since there’s no certainty that Trac will emerge as the player most favored by physicians. What many providers do believe is that doctors, at least during the infancy of electronic forms processing, are likely to lean heavily on one system.

“If they [doctors] have to use two or three different systems, they will be less likely to use any,” said Joel Mills, CEO of Advanced Home Care in High Point, N.C., who is currently converting his paper CMNs to Trac’s CareCert e-CMN.

Since its first rumblings in the market, SecureCare has generated little noise in public, excluding some unwelcome financial restructuring news. The company did do a visible deal with VGM and is quietly lining up HMEs, but it is devoting much of its energy to the negotiation of agreements with physician groups.

“We’ve just signed an agreement with the American Medical Group Association,” said Nasto. “They’ve got 250 member groups that include 68,000 physicians all across the country. More importantly, they have endorsed our product for their physician membership.”

At Trac Medical, they don’t discount the value of the physician. “The physician is the ultimate decision-maker,” said Randi Neal, vice president of operations at Trac.

But while SecureCare dispatches a dedicated sales force into the physician’s office (That’s all we do,” said Nasto.), Trac focuses on the supplier.

“The driver is the pain-feeler in the process,” said Neal.

The two leading e-CMN strategies are vastly different from each other. SecureCare is calling on the physician. Trac calls on the HME. SecureCare requires the physician to load software onto his system. Trac’s system enables a doc to access his e-CMNs from any Web browser.

“This is a classic VHS v. beta situation,” said one HME supplier who asked to remain anonymous. “While the outcomes appears obvious to many, I don’t think it is.”

This supplier’s large HME company has signed an agreement with Trac and is successfully processing Trac’s CareCert e-CMNs. But the company has not closed the door on SecureCare. Indeed, on Sept. 1, the company is opening the door to business with SecureCare.

“As a provider, we aren’t the ones who make the final decision on which system physicians choose to use,” he said. “My perspective is, we serve at the request of, or in the grace of the physician, and they are going to make the final decision of whether or not they believe Trac Med or SecureCare provides the greatest advantage to them.”